Investing.com -- Stocks tumbled on Tuesday, but recovered some of the ground they lost, as investors await the Federal Reserve's decision on interest rates.
While most market-watchers expect a quarter of a percentage point hike when the Fed announces its decision tomorrow afternoon, it's the forward guidance that people are interested in. More than half of futures traders expect the Fed will pause rate hikes at its next meeting in June while it takes a look at the effect its tightening actions have taken to now.
Weakness in the regional banking sector is another factor the Fed will be considering. Shares of regional banks such as PacWest Bancorp (NASDAQ:PACW) are under pressure, and investors are worried there could be a further tightening in credit. Banks are being squeezed by rapidly rising rates, which are causing the value of assets on their balance sheet to drop.
Fears about the debt ceiling deadline are also weighing on stocks Tuesday. Treasury Secretary Janet Yellen says the government could run out of ways to continue to pay its obligations by June 1 if the ceiling isn't raised or suspended. But lawmakers on Capitol Hill are in a standoff on the issue, with Republicans wanting steep spending cuts to raise the limit. Democrats say it should be raised without conditions.
Investors also have Friday's jobs report to look forward to, another key economic indicator. Analysts expect the economy added 179,000 jobs in April, lower than the previous month.
Here are three things that could affect markets tomorrow:
1. FOMC decision
It's decision day again at the Fed's Federal Open Market Committee. The decision is due out at 14:00 ET, and a press conference featuring Chair Jerome Powell will start at 14:30.
2. Qualcomm earnings
Chip maker Qualcomm Incorporated (NASDAQ:QCOM) is expected to report earnings per share of $2.15 on revenue of $9.09 billion.
3. CVS Health
Healthcare company CVS Health Corp (NYSE:CVS) is expected to report earnings per share of $2.10 on revenue of $80.9B.